Apple can see incredible profits from its move into health tech: Former CEO John Sculley

Key Points
  • Apple's next big thing will be health technology, says the tech giant's former CEO, John Sculley.
  • "We can expect to see some real innovations over the next couple of years," he says.
  • And it's not only the devices, but the subscription services as well — which he thinks will be "incredibly profitable."
Former Apple CEO John Sculley on company's new subscription services

Apple's next big thing will be health technology, the tech giant's former CEO, John Sculley, told CNBC on Wednesday.

"Sensors and algorithms are getting better and smarter," he said in an interview with "Closing Bell."

"We can expect to see some real innovations over the next couple of years. And the game change is not just the devices," he added, pointing to the Apple Watch and Airpods. "It's the subscription services in health, which can be incredibly profitable and really big growth gainers for Apple"

And it's not just Apple that will benefit — Amazon is poised to as well, said Sculley, who was Apple CEO from 1983 to 1993.

Apple unveiled its latest services on Monday, including Apple News+, Apple Card, Apple Arcade and Apple TV+. Analysts, however, were unimpressed.

"With small calculated impacts from these, 'other services', we expect the focus to return to the slowing iPhone business post this event," Goldman Sachs analyst Rod Hall said.

However, Sculley believes Apple is building on its iPhone business in a way that is going to help transform its business.

"Now that there is an install base of an incredible size with the iPhone, you're seeing Apple move into other related services that can fit into the Apple hardware ecosystem," he said.

"With consumer wearables, we're just at the early days of something that can be extremely important," he added. "It may be biggest gainer of share of growth of anything that Apple has. Not the largest share of market, but share of growth and probably very profitable share of growth with subscription services for health."

In fact, the pivot into health tech is already underway, with the Apple Watch now doing things like taking an electrocardiogram and tracking heart rhythm.

"We are going to see real innovations coming with glucose monitoring that's noninvasive, and the ability to get accurate data and being able to transmit that data across networks, going out to physicians," Sculley said.

"Consumers trust their physicians. And doing that with privacy, which is an Apple hallmark, is totally real."

— CNBC's Michael Bloom contributed to this report.